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Retirement

Starrs

TJ Expert
Aug 1, 2017
4,295
Indiana, United States
Random thread here so bare with me. With annual raises and all I think it’s time to bump up the 401 k. Company matches up to 4%. Is 10% to aggressive? For those of you that are actively involved in a 401k or have a retirement account setup what do you have taken out pretax?
 
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DHunt

TJ Enthusiast
Supporting Member
Jun 12, 2018
224
Harbison Canyon
Depends on several things. Most important is your timeline. If you save a lot early, it will be compounded into a lot when you need it. 10% is a good place to start, more if you can stand it. Without a doubt, your savings while you're working will be critical to your life when you're not.
 
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cliffish

TJ Addict
Supporting Member
Oct 22, 2017
2,708
St James, NY, United States
Wife and myself have been maxing out the 401K for the last 20 years...now that we are both 50 the catch up rule allows us to put $24.5K each per year. Her company does a 6% match but that came at the expense of a frozen then dissolved pension and the removal of lifetime retirement healthcare...I would rather have those.
 
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Starrs

Starrs

TJ Expert
Aug 1, 2017
4,295
Indiana, United States
Wife and myself have been maxing out the 401K for the last 20 years...now that we are both 50 the catch up rule allows us to put $24.5K each per year. Her company does a 6% match but that came at the expense of a frozen then dissolved pension and the removal of lifetime retirement healthcare...I would rather have those.
You make 10% sound weak! Lol. Bravo
 

cliffish

TJ Addict
Supporting Member
Oct 22, 2017
2,708
St James, NY, United States
All comes down to what you have left over to invest...We stayed in the same house we bought in 97..bought (not leased) our cars 1 year old and kept them. If the wife got a big comp check it went into the bank, we never said "what should we buy with it". I am not going to lie, a good income has blessed us (of course a lot work also went into it). But, I have seen many people with greater incomes have nothing at the end of every year.
 
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Starrs

Starrs

TJ Expert
Aug 1, 2017
4,295
Indiana, United States
All comes down to what you have left over to invest...We stayed in the same house we bought in 97..bought (not leased) our cars 1 year old and kept them. If the wife got a big comp check it went into the bank, we never said "what should we buy with it". I am not going to lie, a good income has blessed us (of course a lot work also went into it). But, I have seen many people with greater incomes have nothing at the end of every year.
Makes sense. Make a decent income so it’s dumb to not put forth a good chunk into my retirement...takes away that urge to buy something stupid. I know it’ll pay off later that’s for sure. What do people do if they don’t have a retirement? Could you imagine?
 

cliffish

TJ Addict
Supporting Member
Oct 22, 2017
2,708
St James, NY, United States
Makes sense. Make a decent income so it’s dumb to not put forth a good chunk into my retirement...takes away that urge to buy something stupid. I know it’ll pay off later that’s for sure. What do people do if they don’t have a retirement? Could you imagine?
I still wonder that..I also sometimes think maybe I should have spent more...everyone seems too and they don't seem to worry. I am sure I will leave my kids with way too much money when I am gone.
 
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JEEPCJTJ

TJ Enthusiast
Supporting Member
I was in a 401k plan for 14 years where the company would "match" $0.25 for every dollar up to 6% so 6% is what I did. I pretty much split it up 4 ways, large cap, small cap, foreign and savings. When I was laid off in 2009 I had so much time on my hands that I looked into what I put in, what they matched, and what we made. Basically at my 7th year in, I had a total of just over $80,000. But while looking into this 7 years later I was just a few $$ over $40,000 which was within $100 of what I put in and my employer matched. If it wasn't for the match I'd have done just as good burying it jars in my back yard but I just left that $40,000 sit wherever it was because I've never had another 401k to get into. Ten years later this brought it up to $88,000 which is about 10% higher than it was 17 years prior. I've now moved it into an IRA and it seems to be working it's way down again. Based on all this it seems that when you retire is better at some time and worse at some other time and there is no friggin' way to know ahead of time which will be which.

I will say that all of these numbers would have been higher if I had hit the max of 15% but at the time I had kids still at home and thought money in my pocket was better. I might have been wrong. I honestly don't know.
 
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cliffish

TJ Addict
Supporting Member
Oct 22, 2017
2,708
St James, NY, United States
Another big reason to overload the IRA/401K is you do still have access to it...there will be tax implications but it is still there. It is funny you brought up medicaid...the 401K money is protected...maybe not the mandatory minimum distribution but the principal. We are still going through dealing with medicaid...my mother in law finally had hit the point of dementia nursing home care @$14,000 per month. She only lasted 4 months in the nursing home until she lost that battle, but my father in law got the remains of her IRA/401k of a couple hundred thousand.
 
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Starrs

Starrs

TJ Expert
Aug 1, 2017
4,295
Indiana, United States
Another big reason to overload the IRA/401K is you do still have access to it...there will be tax implications but it is still there. It is funny you brought up medicaid...the 401K money is protected...maybe not the mandatory minimum distribution but the principal. We are still going through dealing with medicaid...my mother in law finally had hit the point of dementia nursing home care @$14,000 per month. She only lasted 4 months in the nursing home until she lost that battle, but my father in law got the remains of her IRA/401k of a couple hundred thousand.
I deal with Medicaid a lot through work, and it’s some hairy stuff.
 

Mr. Bills

TJ Addict
Nov 24, 2017
1,560
Area Code 530
Random thread here so bare [sic] with me. With annual raises and all I think it’s time to bump up the 401 k. Company matches up to 4%. Is 10% to aggressive? For those of you that are actively involved in a 401k or have a retirement account setup what do you have taken out pretax?
Three simple rules to avoid being forced to live on cat food during retirement:

1. Always contribute enough to a company 401K to take full advantage of employer contributions.

2. Make the maximum contribution to retirement accounts allowed by the tax code each and every year.

3. Save 'til it hurts.
 

jazngab

TJ apprentice
Supporting Member
Aug 23, 2018
702
Montgomery County, PA, USA
I max out my contributions every year as well and I was doing real well being financially responsible, paid off cars, school loans almost done......then I bought this damn Jeep 6 months! Been downhill since smh. I’ve learned even when you think you’re done modding, you’re never done!
 

tworley

TJ Addict
Supporting Member
Ride of the Month Winner
May 23, 2018
2,269
Morrison, CO
My last company matched up to 10%, I miss that benefit. \

My current job matches up to 6%. Contribute what you can, pretty soon you learn to adapt and read your paycheck minus that contribution.
 
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tomtaylz

LJR Addict
Supporting Member
Ride of the Month Winner
Feb 18, 2018
1,974
San Francisco, CA, USA
Yeah if you get a raise too my trick is just to immediately allocate that money away to some sort of savings so then I’m living with the same amount as I have been which I’m still comfortable with and any additional adjustments just go straight into savings/401/Roth/ whatever before I see it.
 
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Starrs

Starrs

TJ Expert
Aug 1, 2017
4,295
Indiana, United States
Yeah if you get a raise too my trick is just to immediately allocate that money away to some sort of savings so then I’m living with the same amount as I have been which I’m still comfortable with and any additional adjustments just go straight into savings/401/Roth/ whatever before I see it.
That’s kind of how I have been gong about it also. Just nice to see how everybody handles their futures lol
 
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Mike_H

Rust Belt Heavyweight
Supporting Member
Feb 28, 2017
4,435
Grand Rapids, MI, United States
I spent a lot of years saving enough to get my Company's max match (various companies) and maybe a couple percent more. Recently (like the last 5 years) I've really been pushing the throttle down on my savings. My 401k and HSA are both maxed out. Next year, I'll start with my investments outside of "retirement" savings. Like getting the money sitting in my savings account somewhere it will earn more than a quarter of a percent. Feeling pretty good about where I'll be at retirement...if I play my cards right, I may even be able to retire early.

My advice...Max the 401k. You are young yet...that money will be SO valuable later. Get used to it being taken now, and once you're married and have kids and all that, you'll be used to not having it.
 
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Starrs

Starrs

TJ Expert
Aug 1, 2017
4,295
Indiana, United States
I spent a lot of years saving enough to get my Company's max match (various companies) and maybe a couple percent more. Recently (like the last 5 years) I've really been pushing the throttle down on my savings. My 401k and HSA are both maxed out. Next year, I'll start with my investments outside of "retirement" savings. Like getting the money sitting in my savings account somewhere it will earn more than a quarter of a percent. Feeling pretty good about where I'll be at retirement...if I play my cards right, I may even be able to retire early.

My advice...Max the 401k. You are young yet...that money will be SO valuable later. Get used to it being taken now, and once you're married and have kids and all that, you'll be used to not having it.
After the wedding I think that will be the plan. That seems to be the consensus. If you can max it out go for it.